South Korea is already a key player on the global cryptocurrency stage but a new report by blockchain intelligence startup Cindicator suggests that this is only the beginning.

South Koreans are estimated to account for 30% of all cryptocurrency trading in the world and about 30% of locals are said to have invested in them. That figure could be as high as 50% among white-collared professionals.

Steve Lim, CSO of South Korean crypto exchange Coinone, told Forbes in an interview last year that “people were crazed over it.”

“Grandpas and grandmas come to our office lobby and say they want to put [in] half a billion won (US$447,000). We ask them how they heard about us, and they say, ‘I heard about you through a friend who invested a couple thousand and made a killing, and I want to do it too’ … but they have no idea how to use the app or email.”

According to the Korean Market Analysis paper, released on Thursday by Cindicator, South Korea is poised to play a major role in embracing cryptocurrencies.

“Our research indicates that the role of South Korea in the global blockchain industry will continue to increase,” said Simon Keusen, head of analytics at Cindicator.

“The country is very open to new technology. The enthusiasm for crypto assets is palpable. Latest legislative initiatives show that the government understands the potential of blockchain technology. We believe South Korea will play an important role in driving the adoption of cryptocurrencies globally.”

Cryptocurrencies exploded as a mass phenomenon through a combination of factors, the report notes, including an inherent openness to innovation, significant trading volumes and developments in legislation.

Although Bitcoin “did not catch the attention of South Koreans more than it did for any other population,” South Koreans were quick to jump on Ethereum.

“After missing the first train, however, they made sure that this wouldn’t happen a second time: Ethereum was coming and they were more than ready,” the document reads. And Ethereum was just the first step on a long road of cryptocurrencies.

Today, South Korea hosts some of the largest cryptocurrency exchanges in the world in terms of trading volume. Bithumb, one of the country’s biggest exchange, ranks in the top position for the last 30 days by volumes in USD at about US$60 billion.

Top cryptocurrency exchanges by USD volume

The platform is currently South Korea’s second largest cryptocurrency exchange with a 33% market share, behind Upbit, Dunamu’s cryptocurrency exchange platform, at 53%. Smaller players include Coinone (8% market share) and Korbit (6%).

Cryptocurrency exchanges do not only support trading but also contribute to the development of South Korea’s broader blockchain industry. One example is Cross, a platform based on blockchain aimed at facilitating cross border money transfers being developed by Coinone. Bithumb has partnered with Asian e-commerce firm Qoo10 to launch a cryptocurrency payment service, and is currently working with SeriesOne, an American fintech firm, to open a security token exchange.

Blockchain innovation in South Korea is also supported by projects accelerators like Deblock, which focuses on investing in blockchain-based projects, and notable startups and initiatives such as iChart, a medical database built on blockchain technology that allows information to be securely shared among hospitals developed by blockchain startup Mavlux, and ICON, which aims to build a decentralized global network and a platform for smart contracts and DApps. Several institutions are already using the ICON blockchain, among them private companies like banks and insurance companies but also universities and hospitals.

Kimchi Spread

The report notes a price difference between bitcoins bought in South Korean won in South Korea and bitcoins bought in US dollars in the rest of the world, a phenomenon it refers to the Kimchi Spread or Kimchi Premium.

Data from last year suggest that the Kimchi Spread had an average size of 5.5% and a median of 2.6%. The premium reached its maximum (about 50%) on January 8, 2018, as did the total market capitalization of the crypto market (US$800 billion).

Kimchi Spread

The spread is due to the country’s “very strong internal demand fuelled by hype, Koreans’ continuous search for short-term profits and its country’s specific economic characteristics,” the report says.